A fixed annuity with long term care benefits provides retirees with guaranteed growth and income, while also offering an added layer of financial protection if extended care is needed later in life. For many families, it can be a smart middle ground between keeping money in low-yield CDs and buying a traditional long term care insurance policy . At Diversified Insurance Brokers, we specialize in pairing annuities with long term care riders, helping clients cover the rising costs of nursing homes, assisted living, and home health care—all without sacrificing retirement security.

Instead of “use-it-or-lose-it” premiums, a fixed annuity with LTC benefits lets you reposition existing assets into a single solution that can serve as both a conservative growth vehicle and a dedicated pool for future care. If you end up not needing care, the contract can still provide income, leave a death benefit, or be used for other retirement goals.

How Fixed Annuities with LTC Benefits Work

With a fixed annuity, your money grows at a guaranteed interest rate, similar to a CD but with tax advantages and different LTC tax rules . By adding a long term care rider , you can access enhanced benefits if you need extended care later in life. This typically means your annuity payments or account value are multiplied (often 2x–3x) when used to cover qualified long term care expenses, subject to monthly and lifetime maximums.

To qualify, you generally must meet long term care “triggers,” such as needing help with two of the six Activities of Daily Living (ADLs) (like bathing and dressing) or having a severe cognitive impairment. Once triggered, the contract can accelerate your annuity value and/or pay additional LTC-specific benefits for care at home, in assisted living, or in a nursing facility.

Why Consider This Option?

• Dual protection: Guaranteed annuity growth plus a dedicated pool for long term care coverage, so the same dollars work twice.
• Flexibility: Use funds for retirement income, legacy, or extended care needs—unlike stand-alone LTC where you may never use the benefits.
• No “use it or lose it” premiums: If long term care isn’t needed, the annuity still provides guaranteed value for income or heirs.
• Tax advantages: Many LTC-related payouts are designed to be received on a tax-favored basis, and growth inside the annuity is tax-deferred. You can also review how long term care benefits are taxed .
• Better leverage on safe money: Repositioning conservative assets (cash, CDs, existing annuities) into a fixed annuity with LTC benefits can create a larger pool of potential care dollars without adding market risk.

Who Is a Good Fit?

A fixed annuity with long term care benefits may be ideal if you:

• Want predictable growth with no market risk, similar to a MYGA but with added LTC upside;
• Are concerned about the rising costs of long term care and want an alternative to traditional LTC policies or return-of-premium LTC plans ;
• Prefer to use a single lump sum—often from an existing annuity or low-yield account—to create a dedicated non-qualified long term care annuity ;
• Want the ability to leave a legacy if care is never needed, instead of seeing premiums disappear;
• Are planning ahead for a spouse and want to explore shared-benefit style designs so both partners have protection.

How This Compares to Traditional LTC Insurance

Stand-alone long term care insurance is still a strong solution for many families, especially when you want pure LTC leverage and flexible benefit design. However, premiums can increase over time, and if you never need care, you may feel like you “got nothing back.”

By contrast, with a fixed annuity and LTC benefits:

• You start with a known annuity value and guaranteed interest rate;
• Your LTC rider charges are typically drawn from the annuity, not separate LTC premiums billed for life;
• If you never need care, you still have an annuity that can be used for income or left to your beneficiaries—often coordinated with your annuity death benefit options .

Many clients use a hybrid strategy: a fixed annuity with LTC benefits for leveraged care dollars plus either traditional LTC or shared-benefit LTC riders for additional protection.

Coordinating Annuity LTC Benefits with Medicare & Other Coverage

One of the biggest misconceptions is that Medicare will pay for a long stay in a nursing home or assisted living. In reality, Medicare does not cover most long term care , and Medicare and LTC insurance are not the same thing .

A fixed annuity with LTC benefits fills this gap by creating a dedicated pool of funds that can be tapped if you need help with ADLs or have a cognitive impairment. We’ll also help you coordinate these benefits with:

• Existing traditional LTC policies you may already own;
• Retirement income from Social Security and annuities;
• Other health coverage, including Medicare supplements or Medicare Advantage.

Why Work With Diversified Insurance Brokers?

Since 1980, we’ve helped families design retirement income strategies that balance guaranteed security and protection from unexpected health costs . As an independent, family-owned agency with access to 75+ A-rated carriers, we compare multiple fixed annuity and hybrid designs before making any recommendations. Our process includes:

• Reviewing your current assets, existing annuities, and LTC coverage;
• Comparing fixed annuities with and without LTC riders, along with Partnership-qualified LTC options where appropriate;
• Showing side-by-side illustrations with different benefit periods, inflation options, and rider designs;
• Helping you understand trade-offs in simple, non-technical language so you can make confident decisions.